The top executive of a Utah-based children's charity resigned on Friday, the same day he was in court on felony charges related to his insurance business.
James Larry Hall II, 37, was replaced by a board that said it didn't learn of his legal troubles until Wednesday, even though the charges were filed by the Utah attorney general's office in February.
Hall was president and chief executive of Children's Miracle Network, which raises money for children's hospitals across North America. The Deseret News reported that IRS filings show Hall was paid a $333,404 salary.
The Children's Miracle Network an organization founded by the Osmond family and "Dukes of Hazzard" actor John Schneider said the charges have nothing to do with the charity.
Hall appeared Friday in 3rd District Court on six felony counts accusing him of misappropriating hundreds of thousands of dollars in insurance premiums from a trust account to finance a house and a company jet.
Hall was prepared Friday to plead no contest to the charges, but in a stunning turnaround, the judge said the state lacked evidence Hall had committed a crime, and he refused to accept the plea, according to Hall's lawyer.
Hall denies any wrongdoing but was willing to take a plea deal to "get it out of his life," said lawyer Max Wheeler.
Judge Deno Himonas challenged a state prosecutor to return to court on Oct. 7 with evidence that Hall allegedly used $400,000 of insurance premiums to finance a house, Wheeler said.
Hall, owner of National Benefit Partners Insurance Agency, wasn't involved in transactions involving subordinates of the company that briefly deposited the $400,000 in his personal account around the time he was buying a house, Wheeler said.
"He wasn't even in town when this happened," Wheeler said.
Wheeler insisted Hall used his own money to buy the house, but he couldn't fully explain why money from a trust account went to a company operating account and to Hall's personal account and back again. "It was a convoluted, confusing transaction," Wheeler said.
The allegations involving Hall's insurance business date to 2003, before he took the top job at Children's Miracle Network in 2006.
In a statement provided to The Associated Press on Friday, the charity's board said it has appointed Scott Burt, the chief operating officer, to take over.
Hall resigned "in light of reports concerning private business activities that took place prior to his employment with Children's Miracle Network," the organization said. "The Children's Miracle Network Board of Trustees was unaware of these activities until Wednesday, Sept. 17."
Assistant Utah Attorney General Shelley Coudreaut didn't return two phone messages Friday from the AP.
Hall's legal troubles were first reported Friday by the Deseret News.